11th May 2006 14:00
First Quantum Minerals Ld11 May 2006 NEWS RELEASE 06-16 May 11, 2006 www.first-quantum.com FIRST QUANTUM REPORTS OPERATIONAL AND FINANCIAL RESULTS FOR THREE MONTHS ENDED MARCH 31, 2006 (All figures expressed in US dollars) First Quantum Minerals Ltd. (the "Company") (TSE Symbol "FM", LSE Symbol "FQM")is pleased to announce its results for the three months ended March 31, 2006.The complete financial statements and management discussion and analysis areavailable for review at www.first-quantum.com and should be read in conjunctionwith this news release. Highlights - First Quarter, 2006 • Net earnings of $54.8 million or $0.89 per share in the first quarter, an increase of 101% compared to the first quarter of 2005 • Cash flow from operating activities of $84.6 million ($1.37 per share) in the first quarter, an increase of 269% compared with the first quarter of 2005 • Copper production in the first quarter of 41,265 tonnes (90.9 million pounds), an increase of 243% compared with the first quarter of 2005 • Acquisition of 71% of Adastra Minerals Inc. ("Adastra") • Gross copper selling price of $2.50 versus LME average of $2.24, and a realized copper price of $2.26 • Construction at Guelb Moghrein is nearing completion with commissioning to begin in the second quarter • Kansanshi's four million tonne sulphide circuit expansion is now complete • A doubling of concentrate stockpiles from year end to 8,272 tonnes of contained copper Financial Results (see attached financial statements) First quarter revenues were $187.2 million, which included copper revenues of$182.4 million ($120.4m Kansanshi and $62.0m Bwana/Lonshi) and gold revenues of$4.6 million. Copper revenues at Kansanshi comprised $84.8 million from coppercathodes and $35.6 million from copper concentrates. Copper revenues increasedfrom the comparative period in 2005 due to an increase in both the market pricefor copper and a 243% increase in copper production. Copper revenues would have been approximately $17.4 million higher were it notfor the requirement to stockpile an additional 4,469 tonnes of copper inconcentrate at Kansanshi due to a continued lack of treatment capacity on theZambian copperbelt until the smelter rebuild at Mufulira is completed. It iscurrently anticipated that the rebuild will be completed in the second half ofthis year, which will reduce concentrate stockpiles to normal operational levelsby the end of 2006. At quarter end, 8,272 tonnes of contained copper inconcentrate were recorded as inventory. Based on the official forward copperprices as at March 31 and total cash costs, this inventory would be worthapproximately $18.5 million in additional net earnings when sold. Thisconcentrate inventory is carried at cost as at March 31, 2006. Copper production was 41,265 tonnes which included 29,547 tonnes from Kansanshi(15,796 tonnes of cathode; 13,751 tonnes of concentrate) and 11,718 tonnes fromBwana/Lonshi. The Company also produced 68,195 tonnes of acid, which representsa 23% increase over the first quarter of 2005 as a result of the inclusion ofthe Solwezi Acid Plant. During the first quarter, the Company sold 27,353 tonnes of copper cathode and9,282 tonnes of contained copper in the form of concentrates. The realized copper price was $2.26 per pound for the quarter. The significantincrease from 2005 is principally due to the increased market price for copper.The average LME cash copper price for the first quarter was $2.24 versus $1.44for the first quarter of 2005. The realized copper price is calculated bydeducting TC/RCs and freight parity charges from the selling price achievedbefore realization charges. The gross copper selling price achieved, beforerealization charges, for the quarter was $2.50 per pound, which was higher thanthe average LME cash price due to favourable contract pricing terms. Certain copper sales agreements entered into by the Company call for "provisional pricing" based on the average applicable cash copper price for aspecified future monthly period. Included within copper revenue as at March 31,2006 was 31,506 tonnes of contained copper that has been provisionally pricedusing a provisional average LME copper price of $2.48 per pound. This equatesto approximately $172.3 million worth of total revenue included that may besubject to adjustment as a result of copper price fluctuations between April2006 and October 2006. The average LME cash price for April 2006 was $2.90 perpound. Gold revenues arise from the sale of gold contained in copper concentrates atKansanshi. Each tonne of concentrate generally contains between 3 and 10 gramsof gold for which a net credit is received by the Company after the deduction ofthe gold realization charges. For the first quarter, gold revenues totalled$4.6 million for 8,079 ounces of gold. The high average realized gold price of$563 per ounce compared to the average gold price of $554 per ounce for thequarter is a result of higher final gold assays being achieved which hasresulted in positive revenue adjustments. In addition, the Company is now using a Falcon concentrator at Kansanshi toallow it to recovery gold from the oxide circuit. At the end of March, 28tonnes, with a grade of approximately 3600 grams per tonne gold, of thisenriched gold concentrate had been stockpiled, which, at the quarter's averagegold prices, has a value of approximately $1.7 million. Cost of sales as a percentage of revenue decreased to 29% in the first quarterof 2006. Although unit costs have risen from 2005, the cost of sales hasdecreased as a percentage of revenue as a result of the rising copper price andthe increased proportion of copper concentrate in sales. Group cash costs of $0.81 per pound of copper for the first quarter of 2006have increased from the first quarter of 2005 of $0.71 per pound of copper as aresult of higher cash costs at Bwana/Lonshi and the inclusion of production atKansanshi. The increased costs at Bwana/Lonshi result from the increased miningcosts (including the increase in strip ratio in July 2005) and an increase inthe cost of oil based consumables. The costs are higher at Kansanshi due to theproduction of copper in concentrate that requires additional processing by thirdparties. These processing costs are included in the cash costs. The increasein cash costs for the Group from the fourth quarter of 2005 has occurred as aresult of the higher costs associated with mining in the wet season coupled withan increase in processing costs particularly in respect of TC/RC's onconcentrate sales at Kansanshi. The appreciation of the Kwacha has also had anegative impact on the Group's cash costs. The Kwacha has appreciated 39%against the US dollar from the first quarter average of 2005 and appreciated 17%from the average of the fourth quarter of 2005. For example, at Bwana/Lonshi,the Kwacha appreciation has caused a rise in cash costs of approximately $0.05per pound compared with the first quarter of 2005. The operating cash inflow for the quarter, before working capital movements, was$105.7 million or $1.71 per share. The operating cash inflow after workingcapital movements was $84.6 million or $1.37 per share. The difference betweenthe before and after non-cash working capital movements can be principallyattributed to the increase in accounts receivables due principally toprovisional pricing adjustments where final price will be determined at a futuredate. Consumable stores, ore stockpiles and copper in concentrate allincreased, which led to a $16.1 million increase in inventory. Included withinthe increase of accounts payable was $15.6 million associated with a prepaymentfor concentrate revenues at Kansanshi. Net earnings for the quarter increased to $54.8 million or $0.89 per sharecompared with the first quarter of 2005 net earnings of $27.2 million or $0.44per share, but were down from the fourth quarter by $2.3 million, part of whichcan be attributed to the increased derivatives losses of $18.8 millionassociated with derivative mark to market losses. As a requirement of theKansanshi project financing, the Company entered into downside protection onboth the copper and gold production. As a result of holding these contracts andother copper options the Company recorded mark to market losses of $18.7 milliondue to the appreciation of both the copper and gold price. The accountingrequirement is to mark to market all open positions to market even if theyrelate to future periods. Actual cash payments relating to premiums andsettlements made during the period were $3.8 million. Kansanshi During the quarter, 1,382,000 tonnes of ore and 2,588,000 tonnes of waste weremined. In the first quarter, the total material mined declined from the fourthquarter of 2005 from a total of 6,739,000 tonnes to 3,970,000 tonnes. The 41%decrease can be attributed to one of the heaviest wet seasons on record.Although the material mined from the pit was significantly less than theprevious quarter, the use of the stockpiles at Kansanshi minimized anydisruption to ore feed to the mill. For the first quarter, contained copperproduction of 29,547 tonnes was comparable to the fourth quarter of 2005. InFebruary, commissioning of the four million tonne sulphide circuit expansionbegan. The continuing ore hardness also resulted in the mills not achieving fulldesign throughput. During the quarter, Kansanshi produced 15,796 tonnes of copper cathode at a cashcost of $0.64 per pound and a total cost of $0.80 per pound. Cathode cash costswere up $0.12 per pound principally due to increased ore costs associated withrehandling during the wet season and higher crushing and milling costs withadditional mill ball requirement due to the hardness of the ore, higher loads ofballs in the mills and higher cost high chrome mill balls. In addition, theunit costs for ore, crushing and milling and leaching costs were up due to alower processed ore grade, higher acid consumption and the appreciation of theKwacha. During the quarter, Kansanshi produced 13,751 tonnes of containedcopper in the form of concentrates at a cash cost of $0.93 per pound and a totalcost of $1.08 per pound. Concentrate cash costs were up $0.06 per pound fromthe fourth quarter 2005 as a result of increased ore costs due to rehandlingrequirements in the wet and lower ore grades ($0.04) and higher TC/RC's ($0.06)and freight charges ($0.05). These were partially offset by an improved goldcredit. The increased TC/RC's stem principally from a benchmark 10% priceparticipation clause above a copper price of $0.90 per pound which is added tothe refining charges (RC). With the rising LME price of copper, the RC hastherefore increased quarter on quarter. This charge is really a reductionagainst revenue but to comply with industry standards for measurement of cashcosts, it is added to unit costs. The additional cost from price participationwas $2.5 million in the quarter. The higher freight charge, as discussed in thefourth quarter, arises from the need to use international smelters as an interimmeasure until the Mufulira smelter upgrade is completed in the second half ofthis year. The combined cash cost for both concentrate and cathode was $0.77per pound with a total cash cost of $0.93 per pound. Bwana/Lonshi During the first quarter, approximately 147,000 tonnes of ore and approximately3,241,000 tonnes of waste were mined from Lonshi. The strip ratio for thequarter was 22:1. Lonshi experienced one of the wettest quarters in its historywith over 500mm of rain falling in January alone. The ore grade wassignificantly higher than both Q1 and Q4 of 2005 and was 8.4% for the quarter.The improvement in material mined from the first quarter of 2005 can beprincipally attributed to the larger mining fleet that was built up during thecourse of 2005. During the first quarter, copper production was 11,718 tonnes. Cash costs were$0.90 per pound and total costs were $1.20 per pound of copper. Cash costs atBwana/Lonshi have risen $0.06 per pound from the previous quarter due toincreases in both ore costs and processing costs. Ore costs are up $0.02 perpound from quarter four 2005 and have been impacted by the increasing price offuel, the appreciation of the Kwacha and lower mining fleet utilization as aresult of mining during the wet season. These costs have been partially offsetby the higher ore grade being processed as a result of the improved ore gradesout of the pit. Processing costs have increased by $0.03 per pound from quarterfour 2005 as a result of the appreciation in the Kwacha and an increase in oilbased consumables and sulphur. The improved ore grade processed and reductionin gangue acid consumption have helped offset these increases. Overall the appreciation of the Kwacha has added approximately $0.05 per poundto the cash costs since the first quarter of 2005 and approximately $0.03 to thecash costs since the fourth quarter. Acid production increased to 68,195 tonnes, of which 31,769 tonnes were producedat Ndola and 36,426 tonnes at Solwezi. Of the total acid produced, 937 tonneswere sold externally, 36,504 tonnes consumed at Kansanshi with the balanceconsumed at Bwana/Lonshi. Guelb Moghrein Copper-Gold Deposit, Mauritania Guelb Moghrein is located 250 kilometres northeast of the nation's capital,Nouakchott, near the town of Akjoujt, in Mauritania. It consists of an open pitmineable copper/gold deposit. In January 2005, the detailed design andengineering contract was awarded with site establishment commencing in March2005. Logistical and supply difficulties in Mauritania have delayed thecommissioning from the first quarter of 2006 until the second quarter of 2006,with commercial production now expected in the third quarter of 2006. Productionwill be initially targeted at approximately 30,000 tonnes of copper inconcentrate and 70,000 ounces of gold per year. Detailed design is now complete. Site civil works and structural steel erectionare complete and final equipment installation is now in progress. During thefourth quarter of 2005, the Environmental and Social Impact Assessment ("ESIA")report was reviewed by the Ministry of Mines and Industry in Nouakchott and wasfound to contain no serious flaws. A provisional mining license was issued inlate-December, with final approval of the ESIA and a final mining license to begranted once a reclamation plan is submitted and bonding put in place. During the quarter, 41,000 tonnes of sulphide ore and 1,156,000 tonnes of wastewere mined. As at March 31, 2006, the Company had capitalized acquisition anddevelopment costs totalling $77.7 million (2005: $66.0m). Included within thisfigure are acquisition costs of $9.9 million. Frontier Copper Deposit, DRC In May 2004, the Company announced the results of an independent copper-cobaltresource estimate completed at Frontier project located in Haut KatangaProvince, DRC. As at March 31, 2006, the Company had capitalized $16.0 million (2005: $9.9m) onthis project. The current scoping study envisages an average annual productionof 80,000 tonnes of contained copper. In January 2006, the FrontierEnvironmental Impact Assessment and Environmental Management Plan were formallyapproved by the Congolese Ministry of Mines and the Exploitation Permit wasgranted in February 2006. At Frontier, the scoping study is almost complete and will then be published. Kashime Copper Prospect, Zambia A preliminary inferred oxide resource has been completed by independentconsultants, Digital Mining Services, and in February 2006, a program ofcombined reverse circulation and diamond drilling was initiated to improvedefinition. A programme of induced polarization is now underway which will becarried out over the eastern and central portion of the target where significantcopper sulphides have been intersected at depth in some holes. During the first quarter ended March 31, 2006, the Company expensed $2.1 million(2005: $1.0m; 2003: $0.4m) on other exploration targets that were predominantlylocated within the DRC and Zambia. Of this amount, $0.2 million was related tothe Kashime Copper Prospect. As at March 31, 2006, no costs associated withthis exploration property have been deferred. Kibamba Copper Prospect, Zambia On March 27, 2006, the Company announced a new discovery at its Kibamba copperprospect in the DRC. A total of the 25 reverse circulation drill holestotalling 2,430 meters and 9 diamond drill holes totalling 1,863 meters weredrilled between October and December 2005. Highlights from the 25 hole drillprogram included 80 meters grading 2.20% copper and 0.25% cobalt. Results forthe diamond drill holes will be announced in due course. Investments -Carlisa The Company holds an 18.8% interest in Carlisa Investment Corp. (Carlisa), whichholds a 90% interest in Mopani. The carrying value of this investment as atMarch 31, 2006 is $9.5 million. There has been no movement in this investmentsince 2002. In the first quarter of 2006, Mopani produced approximately 38,000tonnes of finished copper and 400 tonnes of cobalt. In a recent, Reutersdispatch, Tim Henderson, Mopani's CEO forecasted "copper production to rise to200,000 tonnes in 2006." The increase in forecasted copper production can beattributed to capital upgrades at the mine including the construction of a newsmelter at Mufulira, which will increase its handling capacity from 420,000tonnes to 650,000 tonnes of copper concentrate per year. The smelter isexpected to be completed and operating during the middle of 2006. As at December31, 2005, Mopani had total assets over $700.0 million. As the majority owner ofMopani is a private company not registered in Zambia, only limited publicinformation is available. Adastra Offer On May 1st, 2006 the Company announced that it had successfully acquired controlof Adastra through the acquisition of 71% of Adastra's fully diluted commonshares for cash consideration of approximately $29.3 million and the issuance ofapproximately 3.5 million common shares of the Company. The Company willimmediately begin taking steps to acquire the remaining common shares of Adastrapursuant to a second stage transaction, which is expected to be completed assoon as practicable and, in any event, by early July 2006. Adastra is an international mining company that is currently developing severalmineral assets in Central Africa including the Kolwezi tailings project in theDRC. Effective May 2006, the Company will consolidate its investment inAdastra, which will result in the addition of a minority interest (from theremaining Adastra shareholders) on the balance sheet of the Company until suchtime as the second stage transaction is completed. Outlook As of March 31, 2006, due to the continued lack of smelter capacity on theZambian Copperbelt the Company had stockpiled approximately 8,272 tonnes ofcontained copper in concentrates. Stockpiling of a portion of Kansanshiconcentrates will continue during the second quarter of 2006. Upon completionof Mopani's Mufulira smelter expansion in the second half of 2006, thestockpiled concentrates will begin to be treated. All stockpiled concentratesare expected to be treated by the end of 2006. As a result, the Company'scopper production, revenues, cash flow and earnings should be higher in thesecond half of 2006 compared to the first half. During the first quarter cash costs at both Kansanshi and Bwana/Lonshi werehigher than forecast. Typically cash costs are higher during this period due toseasonal factors in particular the impact of operating in the wet season.Furthermore, Kansanshi unit costs have been impacted by higher spot TC/RC's andfreight charges. If copper prices remain at current levels unit cash costs willcontinue to be impacted from price participation contained in the refiningcharges (RC) which rise and fall based on the price of copper. Cash costs areexpected to improve when the Mufulira smelter begins processing all Kansanshi'sconcentrate as TC/RC terms are based on longer term benchmarks and the freightcredit will be substantially reduced. For the full year of 2006, the Company still expects to produce about 200,000tonnes of copper (a 68% increase over 2005 copper production) which includes140,000 to 145,000 tonnes from Kansanshi, 45,000 to 50,000 tonnes from Bwana/Lonshi and 15,000 tonnes from Guelb Moghrein. In addition, the Company expectsto produce 75,000 ounces of gold which includes 40,000 ounces from Kansanshi and35,000 ounces from Guelb Moghrein. Group cash costs are expected to be in therange of $0.72 to $0.77 before any effect of price participation on refiningcosts. During April, Kansanshi produced 12,734 tonnes of copper which included 5,503tonnes of copper cathode and 7,231 tonnes of copper in concentrate. The fourmillion tonne sulphide circuit expansion is complete. Name plate treatmentcapacity at Kansanshi now stands at eight million tonnes of sulphide ore peryear, while oxide treatment capacity remains four million tonnes per year.Design throughputs are expected to be an average of 12,300 tonnes of copper permonth which includes 6,000 tonnes of copper cathode and 6,300 tonnes of copperin concentrate. Cash costs for 2006 are forecast in the range of $0.71 to $0.77per pound of copper before any effect of price participation on refining costs. At Kansanshi the Company is investing in a High Pressure Leach (HPL) facility totreat a portion of the increased copper concentrate production. The maincomponents of HPL project are two autoclaves, an oxygen plant and an additional35,000 tonne per annum solvent extraction and electrowinning (SX/EW) facility.The main equipment for the autoclave and oxygen plants has been successfullyrelocated from Turquoise Ridge in Nevada, USA and all of the equipment is noweither on site or undergoing refurbishment in South Africa. Two autoclavevessels have been installed on their foundations at Kansanshi. Detailed designwork for the HPL project has been completed, and construction is well underway.Site civil works for the project are complete. All identified project materialshave been ordered and the majority of these have arrived on site. The SX/EW plant areas are close to completion, and pre commissioning of theseareas will commence in June. The structural, plate work and mechanical installation associated with theautoclave and oxygen plant areas are advanced. Piping and electricalinstallation works are underway. Construction of the HPL project is expected tobe completed such that pre-commissioning and commissioning will begin inSeptember / October 2006. The total capital cost is budgeted at $89 millionincluding an upgrade to the Zesco power supply and increased working capital. During April 2006, Bwana/Lonshi produced 4,505 tonnes of copper cathode. Cashcosts for 2006 are forecast in the range of $0.76 to $0.83 per pound of copper.The Company is currently assessing the alternative and most beneficial uses forthe Bwana processing plant after the Lonshi ore has been exhausted. In 2006,the Company also anticipates that it will process external ore purchased fromthird parties, to exploit the full production capacity at Bwana. This occurs forexample during periods of heavy rain, and increases the ore costs. At Guelb Moghrein, with completion of the detailed design and constructionnearing completion, commissioning is expected to begin in the second quarter.Commercial production is then expected to begin in the third quarter. TheCompany remains unable to release an engineering report as the Company is nottreating the current resource statement as compliant with National Instrument43-101. At Frontier, the scoping study is almost complete and will then be published. A large exploration program will begin in May with several drilling programstargeting prospects identified in 2005 including Kashime and Kibamba. On Behalf of the Board of Directors 12g3-2b-82-4461of First Quantum Minerals Ltd. Listed in Standard and Poor's"G. Clive Newall" Sedar Profile #00006237G. Clive Newall For further information visit our web site at www.first-quantum.com North American contact: Geoff Chater or Bill Iversen 8th Floor, 543 Granville Street, Vancouver, British Columbia, Canada V6C 1X8 Tel: (604) 688-6577 Fax: (604) 688-3818 Toll Free: 1 (888) 688-6577 E-Mail: [email protected] United Kingdom contact: Clive Newall, President1st Floor, Mill House Mill Bay Lane Horsham West Sussex RH12 1TQ United Kingdom Tel: +44 140 327 3484 Fax: +44 140 327 3494 E-Mail: [email protected]. or Carina Corbett, 4C-Burvale, Tel: + 44 20 7907 4761 The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. Certain of the information contained in this news release constitute "forward-looking statements" within the meaning of the Private SecuritiesLitigation Reform Act of 1995. Such forward-looking statements, including butnot limited to those with respect to the prices of gold, copper and sulphuricacid, estimated future production, estimated costs of future production, theCompany's hedging policy and permitting time lines, involve known and unknownrisks, uncertainties, and other factors which may cause the actual results,performance or achievements of the Company to be materially different from anyfuture results, performance or achievements expressed or implied by suchforward-looking statements. Such factors include, among others, the actualprices of copper, gold and sulphuric acid, the factual results of currentexploration, development and mining activities, changes in project parameters asplans continue to be evaluated, as well as those factors disclosed in theCompany's documents filed from time to time with the British Columbia SecuritiesCommission and the United States Securities and Exchange Commission. The preceding discussion and analysis and financial review should be read inconjunction with management's discussion of critical accounting policies, riskfactors and comments regarding forward looking statements contained in theunaudited consolidated financial statements for the period ended March 31, 2006.The discussion and analysis of the Company's results of operations should alsobe read in conjunction with the audited consolidated financial statements andrelated notes. Summary of Quarterly Results (unaudited) 2004 2004 2004 2005 2005 2005 2005 2006Statement of Operations and Deficit Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1(millions, except where indicated)Total revenues $26.3 $31.2 $30.7 $38.2 $86.5 $143.0 $176.9 $187.2Cost of sales 13.1 14.1 14.5 16.2 35.0 53.8 46.9 54.5Depreciation and amortization 3.0 2.6 3.0 3.9 6.9 12.5 13.2 12.0Exploration 0.6 1.1 1.0 1.0 1.1 1.5 3.8 2.1General and administrative 1.5 1.4 2.2 2.1 2.2 2.5 2.9 3.7Interest 0.9 0.8 0.7 0.8 3.4 5.8 9.3 6.2Other expenses (income) 0.6 (0.3) (0.9) (0.6) (1.7) 5.9 13.5 18.8Income taxes 2.6 3.7 2.0 3.7 7.2 14.8 19.9 24.6Minority interests - - - - 3.3 6.8 10.2 10.5Equity earnings 0.2 0.1 1.0 - - - - -Net earnings 4.1 7.9 9.3 27.2 29.0 39.5 57.1 54.8Basic earnings per share $0.07 $0.13 $0.16 $0.44 $0.47 $0.64 $0.93 $0.89Diluted earnings per share $0.07 $0.13 $0.15 $0.43 $0.46 $0.63 $0.90 $0.86 Gross copper selling price (per lb) $1.14 $1.19 $1.23 $1.47 $1.53 $1.77 $2.09 $2.50Realized copper price (per lb) $1.11 $1.16 $1.20 $1.44 $1.42 $1.58 $1.97 $2.26Average LME cash copper price (per lb) $1.26 $1.24 $1.40 $1.44 $1.54 $1.71 $1.95 $2.24Realized gold price (per oz) - - - - $427 $482 $467 $563Average gold price (per oz) $393 $401 $434 $427 $427 $440 $485 $554 Total copper sold (tonnes)(2) 19,299 1,674 10,872 12,000 26,535 39,864 40,203 36,635Total copper produced (tonnes) (3) 9,585 11,330 10,942 12,028 28,673 36,196 42,220 41,265Total gold sold (ounces) - - - - 1,370 7,130 5,766 8,079Total acid sold (tonnes) 19,149 16,884 9,664 49 14,939 7,120 219 937 Cash Costs (C1) (per lb) (1) $0.48 $0.45 $0.48 $0.58 $0.60 $0.64 $0.71 $0.81Total Costs (C3) (per lb) (1) $0.67 $0.68 $0.59 $0.75 $0.80 $0.87 $0.89 $1.01 Financial Position (millions)Working capital $28.0 $51.8 $33.9 $61.4 $47.1 $32.2 $76.2 $102.0Total assets $276.4 $385.0 $473.1 $523.1 $561.9 $641.5 $746.5 $842.4Weighted average # shares (000's) 59,434 60,668 60,942 61,267 61,499 61,583 61,639 61,808 Cash Flows from (millions)Operating activitiesBefore working capital movements $11.5 $12.9 $9.8 $19.7 $43.0 $81.1 $101.0 $105.7After working capital movements 10.8 10.4 2.9 22.9 2.3 69.8 115.5 84.6Financing activities 16.5 76.6 49.0 24.8 (22.8) (5.1) (1.6) (17.7)Investing activities (47.7) (69.7) (52.5) (19.0) (2.3) (57.8) (94.4) (42.4)Cash Flows from Operating activities per share(3)Before working capital movements 0.19 0.21 0.16 0.32 0.70 1.32 1.64 1.71After working capital movements 0.18 0.17 0.05 0.37 0.04 1.13 1.87 1.37 Kansanshi Production StatisticsMining:Waste mined (000's tonnes) - 1,175 2,857 1,651 3,185 6,064 5,240 2,588Ore mined (000's tonnes) - - 1,346 2,119 2,050 1,621 1,499 1,382Ore grade % - - 2.4 1.7 2.0 2.0 1.9 1.7Processing:Sulphide Ore processed (000's tonnes) (3) - - - - 434 507 580 782Oxide Ore processed (000's tonnes) (3) - - - - 696 955 1,039 1,044Contained copper (tonnes) (3) - - - - 19,917 27,510 30,934 32,213Sulphide ore grade % processed - - - - 2.0 2.0 2.0 1.9Oxide ore grade % processed - - - - 1.8 1.8 1.9 1.7Recovery % (3) - - - - 86 84 96 92Cathode produced (tonnes) (3) - - - - 8,802 14,395 18,324 15,796Concentrate produced (tonnes) (3) - - - - 8,154 8,670 11,234 13,751Concentrate grade % - - - - 28.9 29.5 28.7 29.3Costs:Cost of sales (millions) - - - - $16.8 $25.6 $18.9 $30.8Cost of sales % - - - - 37 29 15 25 Summary of Quarterly Results (unaudited) (continued) 2004 2004 2004 2005 2005 2005 2005 2006 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1Kansanshi Production Statistics(continued)Combined Cash Costs:Cash Costs (per lb) (1) - - - - $0.63 $0.59 $0.65 $0.77Total Costs (per lb) (1) - - - - $0.80 $0.80 $0.76 $0.93Cathode Cash Costs:Cash Costs (per lb) (1) - - - - $0.61 $0.52 $0.52 $0.64Total Costs (per lb) (1) - - - - $0.80 $0.73 $0.63 $0.80Concentrate Cash Costs:Cash Costs (per lb) (1) - - - - $0.65 $0.71 $0.87 $0.93Total Costs (per lb) (1) - - - - $0.81 $0.90 $0.98 $1.08Revenue ($000's)Copper cathodes - - - - 29,165 54,116 87,624 84,745Copper concentrates - - - - 15,309 34,668 31,850 35,611Gold - - - - 585 3,438 2,692 4,545Total revenues - - - - 45,059 92,222 122,166 124,901 Copper cathode sold (tonnes) - - - - 8,919 14,227 18,505 15,556Copper concentrate sold (tonnes) - - - - 6,024 12,243 9,260 9,282Gold sold (ounces) - - - - 1,370 7,130 5,766 8,079 Bwana/Lonshi Production StatisticsMining:Waste mined (000's tonnes) 2,854 4,213 2,926 2,596 4,025 4,707 5,918 3,241Ore mined (000's tonnes) 85 257 261 152 319 300 209 147Ore grade % 5.2 4.7 6.4 5.3 5.5 3.9 6.1 8.4Processing:Ore processed (000's tonnes) 237 278 256 264 328 363 397 335Contained copper (tonnes) 10,813 12,908 12,824 13,804 13,354 15,003 14,262 13,401Grade % 4.6 4.6 5.0 5.2 4.1 4.1 3.6 4.0Recovery % 89 88 85 87 88 88 89 87Copper produced (tonnes) 9,585 11,330 10,942 12,028 11,717 13,131 12,662 11,718Acid produced (tonnes) 34,265 35,920 35,671 55,275 69,218 64,263 72,040 68,195Surplus acid (tonnes) 19,149 16,884 9,664 49 14,939 7,120 219 937Costs:Cost of sales (millions) $13.1 $14.1 $14.5 $16.2 $17.1 $29.8 $31.8 $23.7Cost of sales % 50 44 47 42 39 54 53 35Cash Costs (per lb) (1) $0.48 $0.45 $0.48 $0.58 $0.57 $0.74 $0.84 $0.90Total Costs (per lb) (1) $0.67 $0.68 $0.59 $0.75 $0.79 $1.01 $1.16 $1.20Revenues ($000's)Copper cathodes 23,398 28,624 29,249 38,172 38,899 49,602 54,694 62,085 Copper cathodes sold (tonnes) 9,553 11,233 11,060 12,000 11,592 13,394 12,438 11,797 Guelb Production StatisticsMining:Waste mined (000's tonnes) - - - - - - - 1,156Ore mined (000's tonnes) - - - - - - - 41Ore grade % - - - - - - - 0.6 (1) For the definition of cash and total costs, reference should be made to section 7 of the MD&A. (2) Coppersold does not include tonnes sold prior to pre-commercial production. (3) Copper produced does not include tonnes produced prior to pre-commercial production. Consolidated Balance SheetAs at March 31, 2006 and December 31, 2005(expressed in thousands of US dollars, except where indicated) 2006 2005 $ $AssetsCurrent assetsCash and cash equivalents 107,521 82,910Restricted cash (note 7) 24,615 20,162Accounts receivable and prepaid expenses 90,671 70,444Inventory (note 3) 77,144 60,854 299,951 234,370Investments 9,790 9,522Property, plant and equipment (note 4) 503,216 471,294Other assets (note 5) 29,430 31,325 842,387 746,511LiabilitiesCurrent liabilitiesAccounts payable and accrued liabilities 54,451 63,492Current taxes payable 28,143 16,055Current portion of long-term debt (note 6 ) 69,955 58,255Other current liabilities (note 7) 45,390 20,377 197,939 158,179Long-term debt (note 6) 153,730 176,767Other liabilities (note 7) 39,950 34,340Future income tax liability 49,081 43,330 440,700 412,616Minority interest 32,965 22,454 473,665 435,070Shareholders' EquityEquity accounts (note 8) 169,090 166,592Retained earnings 199,632 144,849 368,722 311,441 842,387 746,511Commitments (note 12)Subsequent events (note 13) The accompanying notes are an integral part of these consolidated financial statements. For a copy of the notes visit the Company's website at www.first-quantum.com. Consolidated Statements of Earnings and Retained EarningsFor the three months ended March 31, 2006 and 2005(expressed in thousands of US dollars, except where indicated) Three months ended March 31, March 31, 2006 2005 $ $Revenues Copper 182,441 38,172 Gold 4,545 - Acid 167 10 187,153 38,182Cost of sales 54,457 16,166Depletion and amortization 12,007 3,905Operating profit 120,689 18,111Other expenses Exploration 2,134 1,012 General and administrative 3,662 2,106 Interest on long-term debt 6,224 849 Other expenses (income) (note 9) 18,795 (641) Gain on disposal of investment - (16,127) 30,815 (12,801)Earnings before income taxes and minority interests 89,874 30,912Income taxes 24,580 3,736Minority interest 10,511 -Net earnings 54,783 27,176Retained earnings (deficit) - beginning of period 144,849 (3,936)Dividends - (3,000)Retained earnings - end of period 199,632 20,240 Earnings per common share Basic $0.89 $0.44 Diluted $0.86 $0.43Weighted average number of shares (000's) 61,808 61,267 The accompanying notes are an integral part of these consolidated financial statements. For a copy of the notes visit the Company's website at www.first-quantum.com. Consolidated Statements of Cash FlowsFor three months ended March 31, 2006 and 2005(expressed in thousands of US dollars, except where indicated) Three months ended March 31, March 31, 2006 2005 $ $Cash flows from operating activitiesNet earnings for the period 54,783 27,176Items not affecting cashDepletion and amortization 12,007 3,905Minority interest 10,511 -Provision for deferred stripping 3,151 3,903Unrealized foreign exchange gain 674 (126)Future income tax expense 6,666 (186)Stock-based compensation expense 1,020 654Unrealized derivative instruments loss 16,012 -Other 892 543Gain on disposal of investment - (16,127) 105,716 19,742Change in non-cash operating working capital(Increase) decrease in accounts receivable and prepaid expenses (20,851) 8,590Increase in inventory (16,107) (7,732)Increase in accounts payable and accrued liabilities 15,836 2,330 84,594 22,930Cash flows from financing activitiesRestricted cash (4,453) 176Proceeds from long-term debt - 31,523Repayments of long-term debt (12,336) (5,308)Issuance of common shares and warrants 1,478 849Deferred premium obligation and finance fees (2,378) (2,401) (17,689) 24,839Cash flows from investing activitiesProperty, plant and equipment (40,022) (38,865)Investments (268) 21,944Deferred exploration and stripping costs and other (2,123) (2,104) (42,413) (19,025)Effect of exchange rate changes on cash 119 (111)Increase in cash and cash equivalents 24,492 28,744Cash and cash equivalents - Beginning of period 82,910 50,356Cash and cash equivalents - End of period 107,521 78,989 The accompanying notes are an integral part of these consolidated financial statements. For a copy of the notes visit the Company's website at www.first-quantum.com. Segmented InformationFor three months ended March 31, 2006 and 2005(expressed in thousands of US dollars, except where indicated) 2006 KCO BLD GMP FRO CDA Inter-segment Total $ $ $ $ $ $ $Revenues 124,901 68,141 - - 2,299 (8,188) 187,153Cost of sales 30,801 23,656 - - - - 54,457Depletion and amortization 6,244 5,743 - - 20 - 12,007Operating profit (loss) 87,856 38,742 - - 2,279 (8,188) 120,689Interest on long-term debt 5,605 357 - - 262 - 6,224Other 8,114 1,865 - - 14,612 - 24,591Segmented profit before 74,137 36,520 - - (12,595) (8,188) 89,874undernoted itemsIncome taxes 12,594 7,925 - - 4,061 - 24,580Minority interest 10,511 - - - - - 10,511Segmented profit 51,032 28,595 - - (16,656) (8,188) 54,783Property, plant and 340,682 66,767 77,696 15,976 2,095 - 503,216equipmentTotal assets 563,220 124,348 79,563 15,976 59,280 - 842,387Capital expenditures 23,618 955 11,704 6,108 30 - 42,415 2005 KCO BLD GMP FRO CDA Inter-segment Total $ $ $ $ $ $ $Revenues - 40,452 - - 1,627 (3,897) 38,182Cost of sales - 16,166 - - - - 16,166Depletion and amortization - 3,859 - - 46 - 3,905Operating profit (loss) - 20,427 - - 1,581 (3,897) 18,111Interest on long-term debt - 849 - - - - 849Gain on disposal of - - - - (16,127) - (16,127)investmentOther - (13) - - 2,490 - 2,477Segmented profit before - 19,591 - - 15,218 (3,897) 30,912undernoted itemsIncome taxes - 3,736 - - - - 3,736Segmented profit - 15,855 - - 15,218 (3,897) 27,176Property, plant and 269,114 57,069 13,762 3,691 946 - 344,582equipmentTotal assets 347,085 123,003 14,793 3,691 34,537 - 523,109Capital expenditures 20,671 2,047 3,489 - (62) - 26,145 Kansanshi copper / gold operation ("KCO") Bwana / Lonshi division ("BLD") GuelbMoghrein project ("GMP") Frontier project ("FRO") Corporate development,administration and other ("CDA") This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
FQM.L